Block on Trump's Asylum Ban Upheld by Supreme Court
The Supreme Court heard oral arguments today in a case that involves the strange, interesting intersection of free speech rights and, well, credit cards surcharges. New York, along with several other states, prohibits merchants from charging costumers a surcharge for using credit cards. But New York also allows merchants to offer discounts for paying in cash. So, if your groceries cost $20, the store cannot charge you $2 more for paying with a Visa. But they can give you a $2 discount for paying with hard cash.
Semantics, right? Yes, according to merchants challenging the law, who argue that such laws unconstitutionally restrict the speech they can use when describing prices.
Though the New York law being challenged here is fairly old, having been passed in 1984, it has only recently earned the attention of merchants. That's because Visa and MasterCard had, for decades, banned merchant surcharges. The companies dropped that ban in 2013, following a class action suit, and suddenly New York's law took on new importance. Not much later, the current case, Expressions Hair Design v. Schneiderman, arose.
A group of New York merchants, here led by Expressions Hair Design, says the law restricts their speech rights by prohibiting them from describing their pricing scheme as a credit card surcharge rather than a cash discount.
This matters to merchants because, when consumers pay with cards, the merchant incurs a "swipe fee." They can pass that cost on to consumers, but how they describe that can have a significant effect on consumer behavior, the merchants argue. Surcharges discourage credit card use, cash discounts don't. Thus, the phrasing matters.
Merchants want to "describe [a] pastrami sandwich as $10, and then tell you that it's going to cost a certain percentage more, 2 percent more, to pay with a credit card," Deepak Gupta, arguing for the merchants, explained to the Court today.
A Restriction on Speech or a Restriction on Surcharges?
The Eleventh Circuit has found laws restricting that phrasing to violate the First Amendment, while in this case the Second Circuit upheld the law, finding that prices were not "speech" under the First Amendment. Thus, "prohibiting certain relationships between prices" does not violate free speech. The thing being regulated, the Second found, wasn't the merchants' language, but the price differences themselves. The law is a price control, not a speech restriction.
The idea of price controls seemed to resonate with Justice Breyer. Justice Breyer referenced the Office of Price Administration, the World War II price controlling agency, telling Gupta "You're too young to know what the OPA was." (Gupta agreed.) Would you argue that those controls violated free speech, Justice Breyer wondered. "Absolutely not" Gupta responded.
This is the same thing, the justice said. It's not a restriction on describing a price, it's a ban on surcharges. That echoed New York's position. The law is "classic economic conduct regulation," New York Deputy Solicitor General Steven C. Wu argued for the state.
Others seemed to agree. "I just don't see anything about speech in the statute," Justice Sotomayor said.
A Problem With Interpretation
But still, uncertainty about the statute remained. "I can't look at this statute" for a plain language interpretation, Justice Sotomayor later complained to Wu, "because nothing of what you're saying it applies to is said on the face of this statute."
Indeed, the difficulty of interpreting just what the law was and just what it prohibited permeated the arguments. Justice Alito wondered why the Supreme Court shouldn't just remand the case back to the Second Circuit to have it certified to the New York courts for their interpretation. Eric J Feigin, assistant to the Solicitor General, arguing for the federal government, urged the same.
Whether that will happen, or whether the Court will tackle the asserted free speech issues directly, remains to be seen.